Sample CAP Incentives Policies and Procedures for Air ...

SAMPLEPolicies and Procedures ManualFor Community Air Protection

Incentives Projects

Table of ContentsA. Introduction ........................................................................................... 3

B. Air District Roles and Responsibilities .................................................... 5

C. Pollution Source Categories ................................................................... 5

D. Public Outreach...................................................................................... 7

E. Procedures for Project Selection ............................................................ 9

F. Application Review and Project Documentation ................................... 11

G. Contract Requirements ........................................................................ 14

H. Invoicing and Payment ......................................................................... 18

I. Project Inspections ............................................................................... 20

J. Grantee Reporting and Documentation ............................................... 23

K. Project Monitoring and Audits ............................................................. 25

L. Project Compliance .............................................................................. 26

M. Calculation and Use of Interest Revenue .............................................. 29

N. Procedures for California Climate Investments ..................................... 30

This document is intended as a guide for air districts who receive and administer incentive funds under the Community Air Protection (CAP) Program in support of Assembly Bill 617 (C. Garcia, Chapter 136, Statutes of 2017). It provides an example for meeting the full requirements for a CAP Incentives Policies and Procedures Manual, as specified in the Community Air Protection Incentives 2019 Guidelines approved by the California Air Resources Board.

Air districts may adopt a complete stand-alone manual for CAP incentives, or an addendum to their Carl Moyer Program Policies and Procedures Manual that specifies the requirements that apply for CAP incentives. The procedures in Sections F to M of this document are drawn primarily from Moyer Program requirements.

Air District Policies and Procedures for CAP Incentives Projects 3

[[Name of Air District]]

Policies and Procedures ManualFor Community Air Protection

Incentives Projects

A. IntroductionAssembly Bill (AB) 617 (C. Garcia, Chapter 136, Statutes of 2017) provides a

community-focused action framework to improve air quality and reduce

exposure to criteria air pollutants and toxic air contaminants in the communities

most impacted by air pollution. Subsequent legislation has allocated funds for

incentive projects to reduce or eliminate emissions from mobile, stationary, and

community-identified pollution sources. These funds are distributed through the

Community Air Protection (CAP) Program and known as CAP incentives.

Funded by Cap-and-Trade auction proceeds, CAP incentives are directed by

the Air District to projects that reduce the toxic and smog-forming pollutants

that affect public health in communities disproportionately affected by air

pollution. CAP incentives are prioritized for the communities selected by CARB

(or under consideration for selection) through the AB 617 implementation

process. Project decisions follow extensive outreach by the air district to the

public in those communities, and the opportunity for community members to

propose and comment on specific projects.

Projects funded with CAP incentives must align with the goals and requirements

of California Climate Investments, which include targeting funds to projects that

meaningfully reduce local pollutant exposure in disadvantaged and low-income

communities while also showing a net reduction in greenhouse gas emissions.

As directed by the California Air Resources Board (CARB), at least 80 percent of

CAP incentives must be invested in projects located in and benefitting these disadvantaged and low-income communities, with 70 percent invested in

disadvantaged communities.1

1 See CARB Resolution 18-15 at https://ww3.arb.ca.gov/board/res/2018/res18-15.pdf.

https://ww3.arb.ca.gov/board/res/2018/res18-15.pdf


This manual explains the Air District’s local implementation of the Community

Air Protection Incentives Guidelines (CAP Guidelines)2 adopted for the State of

California by CARB. Air District staff will review this manual at least once a year

and keep it available to the public on the Air District website. The manual is

required by Chapter 3, Section B.5 of the CAP Guidelines. It includes the

specific requirements of that section and other procedures referred to in the

CAP Guidelines that affect local implementation. The manual also includes any

Air District requirements that are additional to or more stringent than State

requirements, and any CARB approvals of Air District program elements that

vary from State requirements.

CAP incentives were initially distributed under the auspices of the Carl Moyer

Memorial Air Quality Standard Attainment Program (Moyer Program). Where

there is full consistency in the policies and procedures that the Air District has

adopted under both CAP incentives and the Moyer Program, this manual may

refer the reader to the Moyer Program Policies and Procedures, found at [[insert

district web page]].

In addition to the CAP Guidelines cited above, the following documents

provide further background and policy guidance for CAP incentives.

¨ Assembly Bill No. 617 3

¨ California Climate Investments (CCI) Funding Guidelines 4

¨ Community Air Protection Blueprint 5

¨ Carl Moyer Program Guidelines 6

¨ Proposition 1B Program Guidelines 7

2 https://ww2.arb.ca.gov/resources/documents/community-air-protection-incentives-guidelines 3https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB617 4 https://ww2.arb.ca.gov/resources/documents/cci-funding-guidelines-administering-agencies 5 https://ww2.arb.ca.gov/capp-blueprint 6 https://ww2.arb.ca.gov/guidelines-carl-moyer

7 https://ww2.arb.ca.gov/our-work/programs/proposition-1b-goods-movement-emission-reduction-program

https://ww2.arb.ca.gov/resources/documents/community-air-protection-incentives-guidelines


https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB617

https://ww2.arb.ca.gov/resources/documents/cci-funding-guidelines-administering-agencies

https://ww2.arb.ca.gov/capp-blueprint

https://ww2.arb.ca.gov/guidelines-carl-moyer

https://ww2.arb.ca.gov/our-work/programs/proposition-1b-goods-movement-emission-reduction-program



https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB617



https://ww2.arb.ca.gov/capp-blueprint

https://ww2.arb.ca.gov/guidelines-carl-moyer




B. Air District Roles and Responsibilities[[NOTE: Requirements for this section are found in Ch. 3.B.5(A) of the CAP Guidelines. Language below is provided as an example. The Air District is advised to modify or substitute language appropriate to its local

circumstances.]]

CAP incentives are administered within the Air District’s Planning and

Monitoring Division, under the immediate supervision of the Planning Program

Manager. The Planning Program Manager supervises community engagement,

including public meetings and workshops, and the development of project

proposals. At regular intervals and at least annually when CAP incentives are

available to the Air District, the Planning Program Manager drafts a set of

proposed projects and funding amounts into a CAP Incentives Proposal.

Following review by Air District management, this Proposal is posted on the Air

District website for public review, at least two weeks prior to consideration by

the Air District Governing Board. The Governing Board approves projects for

funding, or may otherwise instruct the Air Pollution Control Officer (APCO) to

make final funding decisions, including decisions on project substitutions.

The Planning Program Manager is assisted by a team of Air Quality Specialists

and/or Air Quality Engineers. Together they execute funding agreements with

CARB, meaningfully engage members of their AB 617 communities (both those

selected by CARB to participate in AB 617 and those under consideration for

future selection) to seek guidance on how best to direct CAP incentives in those

communities, issue project solicitations, evaluate and select projects for the

CAP Incentives Proposal, request fund disbursements from CARB, review

reports by grantees, and carry out project inspections and audits. Members of

this team also respond to public inquiries about potential funding opportunities

and project eligibility, maintain the Air District’s CAP incentives website, and

plan and staff public meetings and workshops, in consultation with the Air

District Public Liaison Officer.

C. Pollution Source Categories[[NOTE: Requirements for this section are found in Ch. 3.B.5(B) of the CAP Guidelines. The Air District is advised to modify or substitute language

appropriate to its local circumstances.]]


The Air District allocated the first year of CAP incentives to mobile source

projects eligible under the Moyer Program, but has greater flexibility with

subsequent year funds. In addition to Moyer projects, these CAP incentives may

be used to support stationary, area and other mobile source projects identified

in the CAP Guidelines. Currently these include (a) hexavalent chromium plating

facilities and (b) specified projects to reduce air pollution in schools, including

emissions from composite wood products, lawn and garden equipment, air

filtration, and school transportation.

In 2021, the Air District will begin considering grant applications from school

districts for purchase of zero-emission lawn and garden equipment, and for new

air filter panels and standalone air ventilation units that meet the CAP

Guidelines requirements. For information on eligible equipment and grant fund

amounts for projects to reduce pollutant exposure at schools, see Chapter 5,

Sections D and E of the CAP Guidelines.8

Chapter 6 of the CAP Guidelines allows the Air District to submit a Project Plan

for CARB’s review and approval to fund additional stationary source categories

and community-identified project categories beyond those already contained in

the CAP Guidelines. Following recommendations at public workshops, the Air

District is preparing a Project Plan that would allow CAP incentives to fund

replacement of stationary engines and boilers with zero-emission technologies

at business and government facilities not regulated under the Cap-and-Trade

Program. This is consistent with public comment in priority communities and State direction to prioritize zero-emission projects with CAP incentives. The Air

District will consider such projects upon CARB approval of the Project Plan. In

addition, the Air District will look for opportunities to use CAP incentives on

projects that support local land use and mobility policies designed to reduce

pollutant emissions and exposure in heavily impacted communities, as

discussed in the Community Air Protection Blueprint.9

In addition, the Air District has worked closely with community organizations

and the Community Steering Committee for [[insert name of AB 617

community]] to develop a Community Emissions Reduction Program under AB

8 https://ww2.arb.ca.gov/resources/documents/community-air-protection-incentives-guidelines 9 https://ww2.arb.ca.gov/capp-blueprint, Appendix C



C:\Users\rmajhail\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\0TJA20JO\Community Air Protection Blueprint, Appendix B, Appendix C-14


617 [[include or footnote the CERP web address as applicable]]. This Program

specifies emission reduction strategies for sources identified as high-priority for

reducing health impacts in that community, including neighborhood truck and

car traffic, railyards, metal processing facilities and oil-and-gas facilities

[[substitute sources specific to each CERP]]. The Air District will place a high

priority on directing CAP incentives to eligible incentive projects located in and

directly benefitting the community, as identified in the Program.

D. Public Outreach[[NOTE: Requirements for this section are found in CCI Funding Guidelines section IV as referred to in Ch. 3.B.5(O) of the CAP Guidelines. The Air District is advised to modify or substitute language appropriate to its local

circumstances.]]

Each year upon Air District execution of a grant agreement with CARB for CAP

incentives, the Air District publishes a solicitation for grant applications, usually

in late spring or early summer. Solicitation materials describe program

objectives, potential funding amounts, eligibility requirements, and procedures

for application including key dates and deadlines. The materials include a

description of administrative and reporting requirements for funded projects,

reference to documents such as these policies and procedures that will guide

project implementation, and expectations for project review and accountability.

After public notice, the Air District holds evening or weekend meetings in

communities of interest under AB 617.10 At these meetings Air District staff

presents information on potential high-priority projects and other eligible

projects that could be funded. Staff invites project ideas from the public and

answers project eligibility questions. The Air District takes comments and

questions from both interested community members and potential project

applicants. Spanish language translation is provided upon request at public

meetings, and solicitation materials are published in English and Spanish.

10 The Air District will provide a webcast of public meetings when feasible, with opportunity for public comment. For reasons of public health (such as during the COVID19 pandemic), Air District staff may elect to hold public meetings entirely online.


In addition to public meetings, Air District staff conducts or participates in

outreach events and campaigns, such as notices through social media, program

mail-outs, public service announcements and radio station advertisements (in

English and Spanish), to help potential applicants identify and access funding

opportunities, particularly for priority populations. The Air District maintains a

mailing list for interested community members and potential project applicants

to stay up-to-date on CAP incentives opportunities. Designated program staff

are available to respond to questions, including questions related to program

access, application/technical assistance, and eligibility determinations. The Air

District also posts information about events related to AB 617 and CAP

incentives on the statewide California Climate Investments Events Calendar

(www.arb.ca.gov/cci-events).

So that the public is informed of the factors that will guide project selection,

project solicitation materials include a description of the project evaluation and

selection criteria that will be used to assess project applications. Except where

adjusted in response to community comment, these are the criteria listed in

Section E of this manual.

Information from submitted applications for CAP incentives projects is made

available for public review on the Air District website. For each project

application or proposal, the Air District lists the name of the applicant (excluding personally identifiable information for private individuals); a brief description of the proposed project, including location; the amount of funding

requested, whether the submitted project would provide direct benefits to

people in disadvantaged or low-income communities, and current project status

as follows:

¨ Project under review,

¨ Project selected for funding;

¨ Project selected as a contingency project;

¨ Project not selected for funding;

¨ Project has an executed contract;

¨ Project completed.

Twice yearly, in spring and fall, the Air District reports to CARB on

implementation of CAP incentives, consistent with the requirements of the CAP

http://www.arb.ca.gov/cci-events


Guidelines and CCI Funding Guidelines. In these reports and in its CAP

incentives disbursement requests to CARB, the District includes each public

outreach event and campaign held for CAP incentives, including the date and

time, place, format, estimated attendance or audience size, accessibility,

meeting materials, whether language interpretation was requested and

provided.

The District also submits to CARB and publishes on its website an annual status

report for the AB 617 Community Emissions Reduction Programs that it

develops with communities, following each Program’s approval by CARB.11

These reports include a description of outreach conducted to promote funding

opportunities, solicit ideas from community steering committees, and identify

project priorities.

E. Procedures for Project Selection[[NOTE: Requirements for this section are found Ch. 3.B.5(C)-(E) of the CAP Guidelines. The Air District is advised to modify or substitute language


CAP incentives are intended for investment in projects that provide direct,

meaningful, and assured benefits in high priority communities suffering

disproportionate shares of air pollution. For this reason, the Air District

prioritizes projects that reduce emissions or exposure in disadvantaged (Senate

Bill (SB) 535) and low-income (AB 1550) communities. Particular attention is paid

to communities selected by CARB, or being considered for future selection,

under AB 617.

In solicitation materials each year, the Air District will specify the criteria used in

project selection, and the weighting applied to particular criteria. The criteria

will be similar to those below, but may be adjusted in response to comments

from members of the public or from notable community-based organizations, or

recommendations from a community steering committee. The solicitation

materials will also specify applicant cost share requirements. Generally,

applicants that are not public entities must cover 15 percent of a project’s

eligible costs using its own resources or other non-public funds.

11 Health and Safety Code § 44391.2(c)(7)


Air District staff will evaluate eligibility for CAP incentives as applications are

received through the solicitation process. Applications found to meet CAP

incentives project eligibility requirements under State guidelines are evaluated

for funding consideration based on the following criteria, as applicable. Note

that emission reductions estimated relative to these criteria are limited to

emission reductions that are surplus to existing rules and regulations.

1. Whether the project or project type has been specified in a Community

Emissions Reduction Program, or recommended by an AB 617

community steering committee, or strongly supported by other

community organizations following public outreach;

2. Hours or miles of operation within one or more SB 535 community or AB

1550 communities during the project lifetime, with higher priority

assigned to SB 535 communities;

3. Amount of PM2.5 and toxic air contaminant emission reductions

projected within the AB 617, SB 535, or AB 1550 community during the

project lifetime;12

4. Cost-effectiveness of criteria pollutant emission reductions estimated

from the project during its lifetime;13

5. Whether the project incorporates zero-emissions equipment,

technologies, or charging infrastructure, especially for medium- and

heavy-duty vehicles;

6. Whether the project will provide demonstrable reductions in greenhouse

gas emissions, such as through reduced consumption of fossil fuels

12 State guidelines make reducing PM2.5 and air toxics where needed a pre-eminent purpose of the CAP incentives projects. Especially when needed to support Community Emissions Reduction Programs the Air District elects to weigh this criterion more heavily. For some project types, reduced pollutant exposure at sensitive receptor sites may be substituted for this criterion. Examples are the installation of air filtration equipment at schools and proximity-based projects that support transportation, land use and urban design strategies.13 Mobile source projects outside the CAP Guidelines must meet Moyer Program or Proposition 1B Program cost-effectiveness requirements as applicable. The Air District also considers the cost-effectiveness of stationary source projects. The Air District will consider less cost-effective projects in Community Emissions Reduction Programs, when supported by community steering committees, community organizations, and community members. The Air District will document its cost-effectiveness methodologies and calculations, and inform communities of relative risk when comparing strategies that address different sources and different pollutants.


directly through new vehicles or equipment, or indirectly through

charging infrastructure.

Air District staff will review submitted project proposals and assign a total point

value to each proposal. Air District staff will then publish a list of projects

proposed to receive currently available funds, along with scoring for all projects

submitted. After a period of 10 or more days for public comment, the Air

District Governing Board will consider and adopt a final list of projects for CAP

incentives funding at a noticed public meeting. The list of adopted projects is

posted on the Air District’s CAP incentives web page.

The Air District Governing Board will also approve a list of higher-scoring

contingency projects. Air District staff may substitute contingency projects in

cases where primary projects cannot be completed and delivering emissions reductions within two years. The posted list of projects receiving CAP incentives

will be updated accordingly, with notice to the public.

Applicants should not order or make down payments on new equipment prior

to Governing Board action to approve the project and authorization by Air

District staff following project pre-inspection.14 A grantee may not receive

equipment nor begin work on a repower or retrofit project prior to full

execution of a contract between the Air District and the grantee, unless the Air

District has provided the potential grantee with written notification that any

work performed is not guaranteed funding until a contract is executed. For

infrastructure projects, discretionary costs may be accrued by an applicant prior

to contract execution, but such costs are not reimbursable until after contract

execution.

F. Application Review and Project Documentation[[NOTE: Requirements for this section are found in Ch. 3, Section O of the CAP Guidelines. The Air District is advised to modify or substitute language


14 The term “equipment” as used in this manual refers all equipment eligible for grant funding, including vehicles, engines, off-road mobile equipment, stationary equipment,

filtration devices, lawn-and-garden equipment, charging stations and other infrastructure.


Air District staff will review each project application for CAP incentives funding,

and notify applicants within 30 days if the application is not complete. In such

cases Air District staff make every effort to clarify what is required to make the

application complete. Project applications must include the information needed

to evaluate the project relative to the scoring criteria in Section E, including

cost-effectiveness and location information. The application and all

correspondence with the applicant are kept in a project file. The record of each

project’s scoring and ranking, receipt date, and project selection criteria are

kept in the project file.

Air District staff will work with applicants to ensure that the estimated emissions

reductions are eligible and in excess of adopted regulations, and that the

project meets cost-effectiveness and other applicable requirements of State

guidelines. This will include verifying that the project meets requirements that

apply for the emissions source category in State guidelines. Documentation

requirements include the following.

1. Documentation of historical vehicle, equipment, or engine usage, such as

miles traveled, hours operated, or fuel consumed per year, for 24 months

or as required by source category; 15

2. Documentation of project costs;

3. Engine or retrofit device Executive Orders, if applicable;

4. Proof of vehicle compliance check as needed for on-road projects;

5. Other documentation identified in the source category chapter.

Applicant Certification. Project applications include language informing the

applicant that by signing and submitting the application, the applicant certifies

under penalty of perjury that the information in the application is accurate and

true. The applicant must also provide:

1. A disclosure statement specifying all sources of funding applied for at

the time of the CAP incentives project application. Because the sum of

15 If an applicant has been on active military duty at any time during the previous 24 months, documentation prior to deployment and covering the same length of time as the deployment period may be used to meet the title, registration, usage, and operation in California requirements as applicable for each source category. The applicant must submit a copy of DD Form 214, Certificate of Release or Discharge from Active Duty to verify military service during the deployment period.


project funding from all sources cannot exceed the total project cost, the

applicant must specify whether the applicant has submitted an

application for incentive funds to any other entity or program for the

same equipment (for example, repowering of the same engine). The

applicant must disclose to whom other applications were submitted,

whether funds have been awarded or may be awarded, and the amount

or potential amount of other funding. 2. A regulatory compliance statement certifying that the applicant is

currently in compliance with all federal, State, and local air quality rules

and regulations at time of application submittal, and is not aware of any

outstanding or pending enforcement actions.

Application Signatures. The application will include a section for the vehicle,

engine or equipment owner to sign and date the application. If a third party

completes the application on behalf of the owner, the third party must

separately sign the application.

Subsequent Applications and Limitations. An applicant may re-apply for

project funding if a previous application for the same project has been rejected

by the Air District and is no longer being considered. Once under contract, CAP

incentives participants may not apply for funding for the same project from CAP

incentives, the Moyer Program, the Proposition 1B Program, or any other

incentive program. An applicant who if found to have applied for or received

incentive funds from another entity or program for the same project without

disclosing that information will be disqualified from funding for that project

from all sources within the control of the Air District or CARB.

If the Air District amends the contract to reduce the term, the amended project

must be cost-effective during the reduced contract term, based on the cost-

effectiveness values and limit that applied when the original contract was

executed. If the Air District agrees to accept a prorated repayment of the CAP

incentives grant, the repayment and amended contract execution must both

occur prior to the execution of any new contract for funding.

Emissions reductions from previously funded projects must not be included as

emissions benefits for any subsequent project under CAP incentives or any

other incentive program. In addition, projects funded with CAP incentives may


not be used to generate a compliance extension or credit for regulatory

compliance.

Recordkeeping. The Air District maintains a file for each project selected for

funding, for three years following the end of the contract term. In the event

final payment has not been issued prior to the end of the contract term, the

three-year clock is re-started upon final payment. Applications for unfunded

projects are generally kept a minimum of two years following the solicitation

period, or two years from receipt if there is not a specified solicitation period.

The Air District will keep some clean truck project files for longer periods as

required under Proposition 1B Program Guidelines.

G. Contract Requirements [[NOTE: Requirements for this section are found in Ch. 3, Section Q of the CAP Guidelines. The Air District is advised to modify or substitute language


The Air District will execute a contract with each grantee receiving CAP

incentives, stating the grantee and the Air District as parties to the contract. All

executed project contracts and contract amendments are kept in the Air

District’s project files. An applicant may not order or make a down payment on

new equipment prior to contract execution or written confirmation from the Air

District that its Governing Board has approved the project for funding. Only

after contract execution may a grantee receive new equipment or begin work

on a repower project.16

Contracts will include the following elements.

1. Notices and Signatures. The Air District will include in contracts the

contact information for both parties, and how notices will be sent and

16 Where timely action is required to move the project forward, Air District staff may provide written authorization for the grantee to proceed at his or her own fiscal risk pending contract execution. For infrastructure projects a grantee may accrue discretionary costs prior to contract execution, but such costs are not reimbursable until after contract execution.


received. The contract will include a section for signatures and dates of

signature or contract execution.17

2. Funding Sources. Grantee certification that (a) all funding sources

applied for or received for the project have been disclosed, and (b) the

grantee will notify the Air District of any additional sources of funding

received for the total cost of the project, including sources that become

available after contract execution. Grantees receiving co-funding from

other sources for the project must meet all criteria associated with each

funding source used. Grantees that are not public entities will commit to

providing at least 15 percent of the project’s eligible costs from non-

public sources. The contract will include terms that prohibit the grantee

from receiving grants and other funds that exceed the total project cost.

3. Contract Term. The contract will specify the time terms for project

completion and project implementation. The Air District will ensure

project completion can occur in time to meet grant liquidation deadlines

set in statute.

a. Project completion is the timeframe starting with the date of

contract execution until project post-inspection confirms that the

project has become operational, including the period when

equipment is ordered, delivered and installed.

b. Project implementation is the timeframe used to calculate project

cost-effectiveness. The contract will require the grantee to

operate and maintain the grant-funded project according to the

terms of the contract for the full project implementation period.

4. Project Specifications. The Air District will include in contracts detailed

information on baseline and new equipment. The project application

may be attached to the contract to help meet this need if it is accurate

and complete. The Air District will include the following in contract

language.

a. A statement that the project complies with all applicable

guidelines;

17 Digital signatures, if used, must comply with California Government Code section 16.5, Title 2, California Code of Regulations, sections 22000–22005.


b. Grantee certification that the grantee’s fleet and all equipment is

in compliance with federal, State, and local air quality rules and

regulations in effect at the time of contract execution, and that

grantee will maintain compliance for the full contract term;

c. For repower projects, a statement that installation of the engine

will be completed in a manner that does not void the engine

manufacturer warranty and any remaining warranty provided by

the equipment manufacturer;

d. Projects funded with CAP incentives must be included when

defining the size of the fleet for determining regulatory

requirements;

e. Throughout the contract term, the project will not be used to

generate credits or compliance extensions, and must be excluded

when determining regulatory compliance;

f. The Air District may approve substitution of eligible replacement

equipment that is verified or certified to achieve equivalent or

greater emission reductions than the original replacement

equipment, in the same location as the original project

replacement equipment, following prior request by the grantee;

g. The Air District may include in the contract an estimation of usage

for the old equipment, in cases where 24 months of documented,

verified historic usage is not available. The Air District will base

this estimation on comparisons to the applicant’s documented

historic usage of similar equipment in similar applications,

discounted by 20 percent. Additional forms of estimation or

documentation to verify historical annual usage will be subject to

CARB’s approval on a case-by-case basis.

5. Maintenance. The contract will require the grantee to maintain the

funded equipment according to the manufacturer’s specifications for the

life of the project, including a prohibition on tampering. The grantee

must maintain a working hour meter for projects that use hours of

operation as a means of calculating emissions reductions and cost-

effectiveness. If the hour meter fails, the grantee must immediately

notify the Air District, and remain responsible for validating any hours

not recorded by the hour meter. The grantee must either repair or


replace the non-operating meter or provide other documentation of

equipment operating hours acceptable to the Air District.

6. Payment Terms. The contract will include the following payment terms.

a. Maximum Contract Amount. The maximum contract amount must

not exceed the maximum funding level corresponding to the

current program cost-effectiveness limit, nor may the maximum

contract amount exceed the project incremental cost. The

maximum contract amount must also comply with any funding

caps and other criteria for the specific project category as

identified in the CAP Guidelines. b. Itemized Invoices. Payment terms must require itemized invoices

from the engine or equipment supplier for repowers and

infrastructure projects, paid invoices from the vehicle owner for

new vehicles, and satisfactory post-inspection by the Air District

prior to payment of the owner’s invoice. An invoice payment for a

specific vehicle, engine, or piece of equipment may not exceed

the amount indicated on the project contract for that vehicle,

engine, or equipment. The contract will specify that the Air District

will pay the lower of the contract amount or the final invoice

amount.

7. Reporting. The Air District will include in contracts a provision and dates

for grantees to submit annual reports, commencing no later than 18

months after project post-inspection and continuing annually thereafter

throughout the project implementation phase of the contract. The

contract will inform the grantee that noncompliance with reporting

requirements will require on-site monitoring or inspections.

8. Inspections, Audits and Records. The Air District will include language

in contracts to allow Air District or CARB staff or their designees to

conduct an inspection and/or audit of the project, equipment and

associated records during the contract term. The contract will require

grantees to maintain usage and other records associated with the

project for at least three years after the end of the contract term.

9. Repercussions for Nonperformance. The Air District will include

provisions for grantee nonperformance with the terms of the contract,

including the following.


a. The contract will specify that by executing the contract the

grantee understands and agrees to use the equipment according

to the terms of the contract, and to cooperate with the Air District

and CARB in implementation, monitoring, enforcement, and other

efforts to ensure project emissions benefits are realized.

b. The contract will specify repercussions to the grantee for

noncompliance with contract requirements, including but not

limited to cancelling the contract and recapturing project funds in

proportion to loss of emission reductions or reduction in usage

(subject to the provisions in Section L of this manual for

inadequate use).

c. The contract will inform the grantee that the Air District and CARB

have the authority to seek any remedies available under the law

for noncompliance with CAP incentives requirements and contract

nonperformance. The contract will state that CARB, as an

intended third party beneficiary, reserves the right to enforce the

terms of the contract at any time during the contract term to

ensure emissions reductions are obtained.

H. Invoicing and Payment[[NOTE: Requirements for this section are found in Ch.3.B.5(G) of the CAP Guidelines. The Air District is advised to modify or substitute language


Within 30 days of project completion, the grantee should submit to the Air

District an invoice package that describes all equipment purchased with grant

funds and provides documentation that costs are eligible and have been

expended in compliance with the project description and schedule. The

package will include (a) serial numbers and proof of warranties required under

CAP Guidelines, (b) an itemization of payments to, and copies of invoices from,

vendors, consultants, and contractors, and (c) documentation of hours incurred

to complete the project and the hourly rates for any labor charges. Costs not

directly related to the project will not be included in the invoice, or will be

shown as not eligible for reimbursement by the Air District.


Eligible costs are those required to ensure the effective installation and

operation of the new equipment, not part of typical equipment maintenance or

repair. Transport and installation costs are eligible, as are taxes, provided they

are verified and within the overall grant amount. Tires, axles, paint, brakes, and

mufflers are not eligible costs for engine repower projects. Other ineligible

costs may be specified by source category in the CAP Guidelines.

Invoices are part of the public record for the project. The Air District will

maintain copies of all invoices and documentation of payments in the project

file and in Air District Office of Accounting files [[the Air District would

substitute name for its accounting unit]]. Prior to final payment, the Air District

will verify through physical inspection that the project is completed and

operational, and that any older equipment replaced as part of the project has

been destroyed. Air District staff will verify that the invoice is consistent with

equipment information on the inspection form completed after project

completion, and that the sum of funds paid on project invoices does not exceed

the total project cost.

Payments to Grantees. The grantee may seek a progress payment from the Air

District prior to project completion, if allowed under terms of the contract. In

this case the grantee will submit to the Air District a progress statement and

invoice package with the items listed above for costs incurred to date, evidence

that milestones specified in the contract have been met, and a schedule for

project completion. Interim payments will be at the discretion of Air District

staff following review of the progress statement, contract milestones, and the

invoice package.

The Air District will pay grantees for eligible costs, not to exceed the amount of

the grant, within 45 days of receipt of an invoice package assuming the

completion of required project inspections with satisfactory results. Payment

will be made directly to the grantee unless the contract specifies payment to a

dealer or distributor. If the contract required the grantee to demonstrate a

regulatory requirement is met as a condition of project funding, the Air District

will require documentation that the requirement is met before issuing


payment.18 The contract may specify that a portion of the grant payment will

be withheld pending the receipt and review of one or more reports from the

grantee.

Records Retention. The Air District will retain grant receipts and expenditure

documents, including invoices, contracts, vouchers, personnel records, and

payroll records for five years after the grant liquidation period or the last

recorded grant transaction, whichever is later.

I. Project Inspections [[NOTE: Requirements for this section are found in Ch.3.B.5(H) of the CAP Guidelines. The Air District is advised to modify or substitute language


Project inspections are field visits conducted for projects awarded CAP

incentives. There are several types of project inspections. Except in limited

cases permitted under CAP Guidelines, Air District staff conducts a pre-

inspection prior to executing a contract to verify equipment information in the

grant application. Air District staff then conducts a post-inspection after

completion of the project, to verify that the equipment identified for funding in

the contract agreement has been purchased and installed and is operating

properly, that replaced equipment is no longer operable, and that the

completed project is consistent with the project scope in the contract and the

invoice submitted by the grantee.

Staff will separately inspect replaced equipment to verify its destruction. Staff

may also conduct an inspection during a project audit to verify continued

project operation. Additional or different inspection requirements may apply to

infrastructure or stationary source projects, as specified in the source category

requirements of the CAP Guidelines.

Procedures. Air District staff will arrange the time and location for project

inspections with the equipment owner or operator -- or in some cases, a truck

dealer or the dismantler of old equipment. Inspections are generally conducted

18 Documentation is demonstrated with a letter from the equipment owner or legal representative, except where CARB or Air District certification of compliance is required. See the applicable source category chapter for further information.


onsite by Air District staff, but staff may arrange a remote inspection by

videoconference, with the assistance of an equipment owner, operator, dealer

or dismantler equipped with a suitable camera.

A lead inspector will be identified as a point of contact for the applicant or

grantee. Air District staff will provide their own safety equipment for the

inspection; generally this includes a hardhat, goggles, earplugs, dust mask,

reflective vest, gloves and steel-toed boots. Air District staff will adhere to other

on-site safety requirements as instructed at the project site.

Staff will complete an inspection form with contact information for the inspector

and the applicant or grantee, the inspection date, equipment location, and

information specific to each piece of equipment under inspection. Information

collected may include but is not limited to the items below, as applicable to

both old and new equipment. Where information cannot be obtained at an

inspection, Air District staff will record “NC” or “not confirmed” on the

inspection form and note the reason.

1. Equipment type, make, fuel type, model year, model and unit numbers,

and as applicable and available, engine tier and engine family;

2. Equipment power in kilowatts or horsepower;

3. Equipment serial numbers;19

4. Vehicle identification number, license plate number or other equipment

identifiers, e.g., marine vessel name and identification number;

5. Equipment usage meter reading (usually in hours or miles), if applicable

and used to calculate cost-effectiveness;

6. For pre-inspections, certification or supporting documentation from the

applicant or grantee that the equipment under inspection is in

compliance with applicable rules and regulations;

7. For post-inspection of retrofit devices, information from the labels affixed

on the device and the engine (Note: where such labels are missing the

19 In cases where the serial number is missing or illegible, Air District staff will stamp or tag the engine with a unique CAP incentives number. For equipment that has been replaced, staff will verify and document that the old serial numbers match those on the project contract. Serial numbers are also recorded for electrical agricultural pumps and associated variable frequency devices.


inspector will provide direction to the grantee for the installation of

compliant labels.);

Staff will ask to witness engine or motor start and verify that the equipment is

operated according to its stated use. Other procedures apply to infrastructure

projects based on direction in state guidelines. Staff will verify the battery

charging capability of electric charging stations and the generation of power by

solar and wind projects, for example.

Air District staff will note on the inspection form (and document with

photographs where possible) any concerns, problems, or follow-up issues

identified during the inspection. The lead inspector will notify the CAP

incentives team project lead of completion of the inspection and its results.

Photographs. During inspections, Air District staff will usually take multiple

photographs of each relevant piece of equipment, to ensure pictures are clear

and avoid the need for follow-up visits. In the case of remote inspections, the

lead inspector will request specific pictures of the equipment from the grantee during the inspection; photographs taken should be transmitted to the Air District on the day of the inspection. Photographs will include equipment

identification numbers as noted above, and close-up pictures of each engine

plate or equipment tag. Staff will photograph and obtain information for both

the new and replaced equipment, including verification of old equipment

destruction (e.g., a hole in the block of a replaced engine). Photograph

requirements may vary for stationary source and infrastructure projects. For

submersible pumps staff will ask the equipment owner to take a picture of the

motor name plate information before installation, including make, model, and

serial number.

Air District staff will download photographs to Air District computers using a

filename that includes the project number, date of the inspection and

equipment identifier. Staff will scan and file the inspection form with the

photographs, and retain the hard copy in the Air District project file.

Destruction Verification. For replacement and repower projects, Air District

staff will document the destruction of old equipment to ensure it is not used

again. Replaced engines will be photographed following their destruction; the


photograph should show a jagged hole in the engine block that is at least three

inches at the narrowest point. A portion of the oil pan flange should be

connected to the hole unless infeasible.

For vehicle replacement projects (not repowers), photographs must show cuts

in the chassis or other structural frame; the frame rails between the front and

rear axles should be completely severed to render the equipment unusable. At

some post-inspections, inspectors will collect a dismantler transfer form (DMV

Form REG42 or 488C) from the truck dealer that certifies a dismantler will take

possession of old equipment on or by a certain date. Inspectors will verify that

the form is complete and retain it with electronic records of the inspection.

J. Grantee Reporting and Documentation[[NOTE: Requirements for this section are found in Ch.3.B.5(J)-(K) of the CAP Guidelines. The Air District is advised to modify or substitute language


Air District staff will send reminder notifications to grantees during the month

before annual reports are due. Grantees are required to submit annual reports

to the Air District within 18 months of post-inspection and annually thereafter

for the term of the contract. Annual reports include the following information:

1. Grantee name, address, email address and telephone number;

2. Information needed to uniquely identify the project’s equipment, such as

make, model, horsepower, and serial number;

3. Current location of the equipment identified under item 2;

4. Estimated percentage of time or miles the vehicle or equipment has

been operated within the boundaries of the Air District since the

previous annual report;

5. Estimated percentage of time or miles the vehicle or equipment has

operated within SB 535 disadvantaged community or AB 1550 low-

income community boundaries, and a description of how the estimate

was obtained;

6. Current and past-year readings of usage metering devices (e.g., hour

meter, odometer, or electronic monitoring unit) for the equipment

included in the project, and dated current photographs of the usage

metering devices displaying use as of the date indicated;


7. Estimated energy use since the previous report, in gallons or therms of

fuel or kilowatt-hours of electricity, for each engine, vehicle or other

equipment included in the project;

8. If usage is more than 30 percent below that identified in the project

application, a description of conditions that have affected project usage

and a projection of future usage.

As discussed in Section G and specified in the contract, the grantee must

maintain a working hour meter for projects that used hours of operation as a

means of calculating emissions reductions and cost-effectiveness. In any case

where a usage metering device has failed, the grantee will include in the report

an estimate of hours or miles of operation since the last yearly report (or since

project completion, if a yearly report has not yet been submitted). The estimate

should be supported by fuel receipts, operation logs, or other explanation of

the methods used to determine usage.

When an annual report is overdue, incomplete, or inaccurate, the Air District

will make a reasonable attempt to obtain a complete and accurate report from

the grantee. Air District staff may also request an inspection of the funded

equipment. In the absence of a satisfactory annual report the Air District will

identify the project for a performance audit.

Failure to submit annual reports is considered a breach of the grant contract. It

may result in recapture of grant funds from the grantee and/or jeopardize the

grantee’s eligibility to participate in future incentive and grant programs.

Grantees that have not submitted complete required reports will not be

granted funds for new CAP incentives projects until all reports are satisfactorily

submitted.

Air District staff will review annual reports within 15 days of receipt. This review

will check the completeness and accuracy of the report, whether actual

documented equipment usage compares to contracted usage requirements,

the location of equipment operation relative to commitments in the contract,

ownership of the equipment, and changes to grantee contact information. Air

District staff will follow up with the grantee on issues to be addressed as a result

of the annual report. The Air District will maintain a copy of the report, initialed

and dated by the reviewing staff, in the project file.


Annual reports are part of the public record for the project and the CAP

incentives used to fund them. Members of the public may request copies of the

reports, and the Air District will provide copies under the Public Records Act.

The District will notify grantees of such requests and provide the opportunity to

withhold any confidential business information the reports may include. For

projects funded under a Community Emissions Reduction Program, reports will

be made available to the community steering committee as part of the

Program’s ongoing progress review.

K. Project Monitoring and Audits[[NOTE: Requirements for this section are found in Ch.3, section V of the CAP Guidelines. The Air District is advised to modify or substitute language


CAP incentives projects are monitored during their contract terms to ensure

they are in compliance with the requirements of their contracts and the

program guidelines. Projects are monitored using annual reports, project audits

that involve inspections of selected funded equipment to ensure it is operating

in accordance with the grant requirements, bankruptcy checks, project

inspections, notifications of potential fraud or misuse of grant funds from third-

parties, and grantee self-reporting of problems with the project.

The Air District conducts performance audits of at least five percent of projects

funded with CAP incentives, or a minimum or 20 projects per year. Audited

projects will include projects included in a Community Emissions Reduction

Program and projects with overdue or unsatisfactory annual reports. Audits

include inspections of some or all contracted equipment; projects with multiple

vehicles or equipment will have individual equipment inspections consistent

with CAP Guidelines.

During a performance audit, actual documented equipment usage is checked to

see how the equipment is being used in comparison to the contracted usage

requirements. The equipment location is checked to see where it is operating

relative to any requirements specified in the contract. The inspector checks

serial numbers and confirms the funded equipment is operational. Equipment

ownership is confirmed to see if the funded equipment still belongs to the

grantee, and grantee contact information is verified. Application materials may


also be re-checked if there are questions regarding the accuracy of the

information originally submitted or to identify any administrative errors made by

Air District staff.

Other expectations of the grantee with respect to project audits may be

specified in the contract for the project, which requires grantees to cooperate

fully with inspections and audits, including providing on a timely basis copies of

any project records to the Air District and to State agencies who request them.

In addition to performance audits conducted by Air District or CARB staff,

project financial audits may be conducted by the California Department of

Finance, the California State Auditor, or another State agency. For projects

funded under a Community Emissions Reduction Program, the community

steering committee may recommend that the Air District conduct a project

audit if the committee finds reason for unsatisfactory project implementation.

The Air District will give full consideration to such requests.

L. Project Compliance[[NOTE: Requirements for this section are found in Ch.3.B.5(L) of the CAP Guidelines; see also Chapter 3, section W. The Air District is advised to modify

or substitute language appropriate to its local circumstances.]]

The Air District will work with the grantee when a project is not meeting

operational and usage expectations set forth in the application and contract, to

ensure CAP incentives project requirements are met and emissions reductions

are achieved. The Air District may consider unforeseen circumstances beyond

the grantee’s control in determining repercussions for nonperformance.

The contract requires grantees to notify the Air District if there is a change in

the usage of funded equipment or if equipment is removed from service. Air

District staff will collect a written statement (email or letter) from the grantee

explaining the status of the equipment, including the dates the equipment was

removed from service, and the usage meter readings at the time if available.

Equipment Out of Service. The Air District will address situations where

funded equipment has been removed from service as described below.


1. Sale of the funded equipment: If the grantee no longer owns the funded

equipment, the grantee will either (a) return to the Air District a pro-

rated amount of grant funds as specified in the project contract, or (b)

work with Air District staff and the new equipment owner to transfer the

terms of the contract to the current owner through a successor

agreement.

2. Removal of equipment from the Air District: The grantee will work with

Air District staff to determine how much the equipment has operated

outside of Air District boundaries relative to contract requirements. Air

District staff will consider whether the change of location is temporary or

permanent when considering next steps. Relocation of the equipment

outside the Air District could result in the recapture of grant funds.

3. Equipment stolen or not operational: The grantee is required to maintain

the funded equipment, and ensure it is operational throughout the

project term. If the equipment is not operational, the grantee must repair the equipment, replace it with an emissions-equivalent piece of

equipment (as clean, or cleaner than the funded equipment), or repay a

pro-rated amount of grant funds to the Air District. If equipment is

destroyed in an accident or is stolen, the grantee must provide

appropriate documentation of the loss, which should include an

insurance statement or police report. Before an equipment substitution is

approved, Air District staff must first evaluate the proposed equipment

to ensure that the emission reductions from the proposed equipment are

equivalent or greater. After substitute equipment has been purchased,

Air District staff will inspect this equipment and update project data to

reflect the changes.

Equipment with Inadequate Use. As required under CAP Guidelines, the Air

District works to ensure emissions reductions are realized for the equipment it

funds with CAP incentives. Air District staff review each grantee annual report

and conduct inspections of selected projects to check whether equipment are

still being used in the expected locations and overall activity is at least 70

percent of levels specified in the contract. When average usage over a three-

year period (or for the contract period if less than three years) for a contracted

engine, vehicle, fleet, or other equipment is less than 70 percent of the activity


required in the contract, the Air District will discuss with the grantee

appropriate remedial action, which may include one or more of the following:

1. Extension. The Air District will notify the grantee of a contract extension

to allow more time to meet usage expectations. The project may be

extended for additional years as long as emission reductions remain

surplus to regulatory requirements.2. Funds Recapture. The Air District may require the grantee to return funds

in proportion to the loss of emission reductions, so that recaptured funds

can be assigned to projects that cover the shortfall. 3. Ownership Transfer. The grantee may transfer ownership of some or all

of the project’s equipment to another entity committed to complying

with contract terms. The new equipment owner must complete a

substitute contract with the Air District.4. Recalculation. The Air District may recalculate project cost-effectiveness

based on the reported decrease in usage. If the project is still below the applicable cost-effectiveness limit, calculated consistent with the

methodology and limit in effect on the date of contract execution and

prior to the end of the contract, the Air District will continue to monitor

the project over the next year to determine if additional actions are

necessary. (This option does not apply to projects not subject to a cost-

effectiveness limit, such as charging infrastructure.) 5. Usage Waiver. Grant a usage waiver, without penalty, to the grantee for

a defined time period. The grantee must demonstrate to the Air District’s

satisfaction that the engine, vehicle, or equipment is not being

underutilized in favor of operating other, higher-polluting equipment,

and that the underutilization was due to unforeseen conditions beyond

the grantee’s control, such as (a) a decrease in usage due to economic

recession; (b) unforeseen fluctuations in water allocations or pumping

needs for agricultural irrigation pump engines, (c) significant land

fallowing for off-road agricultural equipment and agricultural irrigation

pump engines.

To be considered for a waiver, the grantee must provide a written request to

the Air District along with documentation that substantiates the need for the

waiver and verifies that higher-polluting equipment is not consequently


receiving more use. The Air District will specify the length of time for which the

waiver is valid. The waiver will not exempt the grantee from any contract

requirement to provide annual usage reports. It will be documented in writing,

approved by the APCO or designee, and included in the project file.

For projects that include multiple pieces of equipment or engines, the Air

District may review and recalculate the funded equipment collectively to see if

the project as a whole has performed as expected. A waiver is not required in

this event.

M. Calculation and Use of Interest Revenue [[NOTE: Requirements for this section are found in Ch.3.B.5(F) of the CAP Guidelines; also see Interest Revenue, p. 3-12. The Air District is advised to

modify or substitute language appropriate to its local circumstances.]]

The Air District tracks interest earned on the funds received from CARB for CAP

incentives in a subsidiary revenue ledger, separate from CAP incentives grant

funds received and other incentive funds. Consistent with other Air District

incentive programs, interest is calculated by applying a rate, specific to fiscal

year and the account where funds are kept, to the average daily balance of CAP

incentives in the Air District account during the fiscal year. The average daily

balance includes interest already earned on the grant, to account for

compounding.

All interest earned is used to support projects selected through the process

described in Section E. The Air District may retain a percentage of interest

earned for administrative purposes, which may vary by fiscal year according to

requirements of statute or State guidelines, as specified in grant agreements

between the Air District and CARB. The Air District will restore any CAP

incentive funds lost due to investment loss, no later than the succeeding fiscal

year.

The Air District will report to CARB annually the interest earned on CAP

incentive funds during the previous fiscal year. The amount reported is added

to the CAP incentives target based on the fiscal year in which it accrued, with a

liquidation period equivalent to the amount of time given to liquidate that fiscal

year appropriation. The Air District works to liquidate earned interest by the


end of the grant performance period, but will remit to CARB any unused

portion of interest within 90 days following the end of the grant period.

Other Non-grant Revenue. In any project where the Air District salvages and

sells scrapped portions of old equipment, revenues will be reported to CARB

and retained as a supplemental source of funds for CAP incentives projects.

Salvage revenues will be tracked in a subsidiary revenue ledger, similar to

earned interest.

N. Procedures for California Climate Investments [[NOTE: Requirements for this section are found in CCI Funding Guidelines section IV as referred to in Ch.3.B.5(O) of the CAP Guidelines. The Air District is advised to modify or substitute language appropriate to its local

circumstances.]]

The Air District has established additional procedures to support the

requirements specified in Section IV of the California Climate Investments (CCI)

Funding Guidelines. These include the following.

Logo and Funding Language. CAP incentives are made possible by California

Climate Investments, as statewide program that puts Cap-and-Trade dollars to

work reducing greenhouse gases, strengthening the

economy, and improving public health and the environment

-- particularly in disadvantaged communities. CAP

incentives encourage industries to invest in clean

technologies and develop innovative ways to reduce

pollution. Grantees are encouraged to include recognition of California Climate

Investments as the source of the CAP incentives for their projects. The Air

District will provide decals or sticker with the California Climate Investments

logo for placement on delivered equipment, and will collaborate with grantees

on appropriate signage at project sites. For more information, visit the

California Climate Investments website at www.caclimateinvestments.ca.gov.

Transparency. In addition to a website for its CAP incentives, the Air District

maintains websites specific to the disadvantaged and low-income communities

that receive priority for CAP incentive projects, with current information about

CAP incentives availability and the process for selection of projects. As

http://www.caclimateinvestments.ca.gov/


discussed in Sections D and E of this manual, the Air District notifies interested

organizations and individuals in affected communities and allows opportunity

for comment prior to funding decisions. Project source categories to be

considered for support with CAP incentives and the schedule for solicitation

and review of applications to be submitted under these source categories are

specified in grant solicitation materials and described in Section D of this

manual. Projects with applications submitted are posted on the CAP incentives

web page, with indication as to project status as listed in Section D.

Methods and Reporting. The Air District reports to CARB semi-annually on

projects with executed contracts, for CARB entry into the California Climate

Investments Reporting and Tracking System. CARB’s emissions reduction

quantification methodologies, co-benefit assessment methodologies, priority

population benefit criteria tables, and reporting templates are used to estimate,

track and report project benefits.20 The Air District works with CARB to post project results including emission reductions on the California Climate

Investments website for the Annual Report to the Legislature.21 This enables the

public to access the project location (e.g., address, census tract), funding

amounts, emission reductions and the methods used to estimate them, and

benefits to priority populations. Where projects and programs are included in

or respond to strategies in a Community Emissions Reduction Program, the Air

District includes information in the program’s annual status report on funds

distributed, equipment deployed, and emissions reduced.

Audits. As described in Section K of this manual, the Air District has its own

procedures to monitor CAP incentives project outcomes through project

performance audits, either during or after project implementation. The Air

District also makes program and project records available for CARB incentive

program reviews. Air District and CARB implementation of CAP incentives are

in turn subject to oversight, including audits by the California State Auditor,

Department of Finance, other State oversight agencies, or a third-party auditor.

20 For these methods and tables, see “Community Air Protection Funds” at https://ww2.arb.ca.gov/resources/documents/cci-quantification-benefits-and-reporting-materials. Types of co-benefits and methods for assessing them are found at https://ww2.arb.ca.gov/resources/documents/cci-methodologies. 21 See www.caclimateinvestments.ca.gov/annual-report and www.arb.ca.gov/ccimap.

https://ww2.arb.ca.gov/resources/documents/cci-quantification-benefits-and-reporting-materials

https://ww2.arb.ca.gov/resources/documents/cci-quantification-benefits-and-reporting-materials

https://ww2.arb.ca.gov/resources/documents/cci-methodologies

http://www.caclimateinvestments.ca.gov/annual-report

http://www.arb.ca.gov/ccimap


The Air District has clear policies in place that allow for full cooperation with

audits conducted by State oversight agencies.

Contact Resources. The Air District provides on its website and in solicitation

materials and reports contact information for the public to ask questions or

obtain additional information (e.g., phone, email, social media). The Air District

designates points of contact for program outreach and partnership

development with and between community groups on funding opportunities,

program application requirements, eligibility determinations, and application

technical assistance. As CAP incentives continues, the Air District will develop a

frequently asked questions document and other resources for technical

assistance. In addition to consulting the Air District, members of the public can

direct general inquires in English or Spanish to CARB’s email

([email protected]) and phone hotline (800-757-2907).

Meeting Investment Minimums. As California Climate Investments, CAP incentives provide the opportunity to yield significant benefits to communities that are exposed to multiple sources of pollution, disproportionately burdened by the impacts of climate change, and are particularly vulnerable to environmental pollutants. Statewide, at least 70 percent of CAP incentives must be invested in projects located in and benefitting disadvantaged (SB 535) communities, and an additional 10 percent in projects located in and benefitting either disadvantaged communities or low-income (AB 1550)

communities or households.

The Air District uses a three-step approach under CCI Funding Guidelines to

evaluate whether these benefits occur from each CAP incentives project.22

¨ Step 1: Identify the Priority Population(s). The project must be located within a census tract identified as a disadvantaged community or low-income community, or directly benefit residents of a low-income household;

22 For a more detailed explanation of the benefit and co-benefit evaluation criteria, see CCI benefit criteria table for Clean Transportation and Equipment at https://ww2.arb.ca.gov/sites/default/files/classic//cc/capandtrade/auctionproceeds/ccidoc/criteriatable/criteria-table-cte.pdf.

https://ww2.arb.ca.gov/sites/default/files/classic//cc/capandtrade/auctionproceeds/ccidoc/criteriatable/criteria-table-cte.pdf

https://ww2.arb.ca.gov/sites/default/files/classic//cc/capandtrade/auctionproceeds/ccidoc/criteriatable/criteria-table-cte.pdf


¨ Step 2: Address a Need. The project must meaningfully address an important community or household need for the disadvantaged community, low-income community, or low-income household;

¨ Step 3: Provide a Benefit. Identify at least one direct, meaningful, and assured benefit from the evaluation criteria that the project provides to priority populations. The benefit provided must directly address the

identified need.

The Air District reports the results of these evaluations by project, using benefit and co-benefit metrics specified in the CCI Funding Guidelines, when it reports to CARB on CAP incentives projects. CARB considers the results of the Air District’s evaluations with those of other air districts to determine whether CAP

incentives investment minimums have been met statewide.

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